Political lefties solve problems by spending taxpayers’ money, hence the term: “tax and spend Democrats.” The Left has been reinforced in this by J.M. Keynes economic refutation of Adam Smith, providing us with “Keynesian economics” as the blessing of government spending as economic stimulus. A doleful economy results from too little demand by consumers; if government replaces that missing demand for a bit, the Keynesians argue, the consumers will be restored to financial health and come back to normal spending, all will thereafter be will. Sure.
The fallacy of this nonsense was clearly stated by economist Frederic Bastiat in 1850.In short, the government can only spend what it extracts from the crippled economy, an economy troubled by having insufficient money to spend. After all, most folk with money to spend, do spend it. When they lack money, they spend less. If the government takes more from them so it can spend, or loads them with future debt, those hardly motivate the taxpayers to act as though they were suddenly rich. Keynes and his subsequent politicians like to bring up the spending that dumps money into the economy while ignoring the inconvenient reality that the money involved was first subtracted from the ailing economy by taxation or by imposing new debt. In our favorite analogy, giving a patient a blood transfusion of blood first drained from him.
So Mr. Trump’s plan to reduce taxes with current government deficit spending, and his plan to spend heavily on roads, bridges and other state infrastructure is good Lefty politics if somewhat overstated Keynesianism. However, it ignores the unpleasant reality that public and private debt are already too high to be repaid and that government deficits are already guaranteeing yet more debt to keep Social Security, Medicare, Medicaid, Obamacare and our various wars around the world alive. Adding the new spending will accelerate the deficits until simply, no one will loan the government any more money.
In response to that, the Federal Reserve is already a source of new funds to the government – funds newly minted from nowhere – and the elimination of cash is touted. Those will combine to put government in control of all the wealth but for any goods exchanged in barter. After all, if all payments are limited to electronic means subject to government access, that government is in control. Sweden and India are already moving to this. It is clearly too appealing for any government to resist.
If these were not intended, we would expect to hear Mr. Trump/Mrs. Clinton pointing to the need to curtail the deficits and presenting their lists of exactly what government expenditures to be cut. From there, we would hear of the taxes to be dedicated to repaying the already accumulated $19 trillion of national debt. We note here that state, local and personal taxpayer debt aren’t included her, but reality will do so at the appropriate time.
Some have told us that we needed to vote for Mr. Trump to escape Mrs. Clinton. When asked what they expected Mr. Trump to do for them under our present conditions, no answer came. Better the demon that you don’t know than the demon that you know, apparently. It will be interesting, unfortunately in the usual Chinese sense, to watch the result, seems to us.
In India, the government’s move against cash immediately produced a run on gold accumulation; the government quickly moved against gold in private hands. Channeling the government of President Franklin Roosevelt in 1933. It can be difficult to maintain individual freedom to act as a government becomes functionally totalitarian….